Milwaukee County

Abele budget still leaves $92 million shortfall in 4 years, study says

Milwaukee County Executive Chris Abele's 2013 budget shows some progress toward solving the county's deep-rooted financial problems, but absent further fixes the county still faces a staggering $92 million shortfall in four years.

That's the conclusion of a newly released analysis by the nonpartisan Public Policy Forum.

First, the good news.

Abele's 2013 budget maintains bus service without fare increases; avoids cuts in safety net programs; increases funding for parks; and offers county workers their first wage increases in several years, the forum report says.

Abele's budget also significantly increases employee costs for health benefits and cuts Sheriff David A. Clarke Jr.'s budget. Those two moves, which have already generated controversy, provide big help in keeping the 2013 budget in the black.

Taken together, Abele's proposed changes help close a $28.5 million projected funding gap for 2013 and chip away at the county's nagging structural deficit problem caused by cost increases outstripping resources, says the report by forum president Rob Henken and researcher Vanessa Allen.

"Those actions are accomplished not with the use of budget gimmicks or rosy revenue projections, but through the establishment of clear spending priorities," the report says, while avoiding taking a stance on whether the sheriff cuts or shifting health costs onto employees are wise moves.

The report refrains from weighing in on whether Abele's proposal for no increase in the property tax levy is advisable. Similar past forum analyses of county budgets put a greater emphasis on the county adopting a balanced approach to plugging budget holes that included cuts and new revenue.

There was a more compelling case for a "modest" property tax increase in previous years, when the budget gap was $50 million to $90 million, Henken said in an interview.

Abele's tax levy freeze mirrors the approach Gov. Scott Walker took during each of his eight years as Milwaukee County executive. (Walker's last county budget, crafted in late 2010, included a small decrease in the levy.)

The County Board approved tax levy increases since 1999 that have averaged 2.7% a year, according to a board analysis.

State-imposed caps limit the county's levy increase to $3 million for 2013, or $4.4 million with a supermajority vote of the board.

Henken said raising the levy was a judgment call. But he sounded a cautionary note.

"There was a convergence of some fortunate circumstances that make 2013 not quite as bad as previous years" for the county budget, he said. "That does not mean that 2014 will not be an exceedingly difficult budget."

That brings up the bad news in the forum report.

"The county's stagnant revenue streams, continued fringe benefit burden, immense infrastructure repair needs and lack of reserves" pose big challenges in coming years, the report said. Legal challenges to moves made over the past two years to trim pension benefits and shift health costs onto employees also create future financial uncertainty, the report says.

If the county loses those lawsuits, that "could pose a severe threat to future budgets," according to the report.

Another big question mark is how the county will pay for transit in 2014, after a pot of federal money runs out.